India has recorded a fairly rapid rate of economic growth in recent years. That growth has been fuelled by rises in government spending and exports, including textile exports. However, India’s unemployment rate has risen. The government is worried that any attempt to cut unemployment may push up India’s inflation rate.
(a)[2]
Define economic growth as a rise in output.
(b)[4]
Explain the possible opportunity cost to India of exporting more textiles.
(c)[6]
Analyse how greater government spending could raise economic growth.
(d)[8]
Discuss whether a government can reduce unemployment without causing inflation.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Rise in a country’s/economy’s output” …